Russia's Kudrin given new clout over economy

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MOSCOW, Oct 5 (Reuters) Russian Deputy Prime Minister Alexei Kudrin today gained sweeping new powers over economic planning, financial markets and pricing for state monopolies in a closely watched carve-up of cabinet duties.

Investors are searching for any hints about who is gaining influence after President Vladimir Putin sprang a surprise reshuffle in September, expected to be the last cabinet change before December parliamentary elections in which Putin will run.

A decree signed by Putin's new prime minister, Viktor Zubkov, spells out the responsibilities of the five deputy prime ministers who outrank other ministers in the cabinet.

First deputy prime ministers Sergei Ivanov and Dmitry Medvedev, favourites in opinion polls to succeed Putin, have preserved their duties.

But Kudrin, the finance minister feted by investors for restoring Russia to fiscal health after the crises of the 1990s and resisting intense pressure to spend windfall oil revenues, was the biggest winner.

Kudrin, 46, will oversee economic, fiscal and monetary policy, financial markets, taxation, anti-monopoly policy, and pricing policies for monopolies such as gas giant Gazprom.

''When budget revenues rise there is always the temptation to spend but under Kudrin we have seen a very balanced and cautious approach to budget management,'' said Natalya Orlova, chief economist at Alfa Bank in Moscow.

''That is what really differentiates Russia from many other emerging markets,'' she said. ''The widening of Kudrin's responsibilities is confirmation that Russia will continue their very balanced policy in relation to the policy.'' ZHUKOV LOSES OUT Kudrin, an economist who helped Putin get his first job in the Kremlin administration in 1996, gained most of his duties at the expense of Deputy Prime Minister Alexander Zhukov, who has made a limited impression in his economic reform role.

Russian media reported that the carve-up of cabinet duties was the subject of intense debate for over a week at the top levels of government.

Kommersant said Zubkov rushed to a Moscow airport on Thursday to agree the division of labour before Putin flew to a conference in Siberia.

Ivanov will oversee industrial policy, transport and communications as well as national security, weapons sales, space, missile production and the nuclear sector.

Medvedev, also board chairman of Gazprom, will oversee the implementation of national projects aimed at modernising housing, education, heath and agriculture.

His duties include the use of natural resources, ecology, the judicial system and youth politics.

Deputy Prime Minister Sergei Naryshkin will continue to oversee trade, the Commonwealth of Independent States (CIS) and foreign policy.

Zhukov will answer for the management of state property, local services and the development of the regions.


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